Total smartphone shipment projections for 2016 have been lowered
to 1.6% year-over-year (YoY) growth, as the market becomes
increasingly reliant on upgrade cycles to drive unit sales,
according to the IDC.

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That's down significantly from the almost 11% YoY growth recorded
in 2015. The new forecast projects smartphone shipment volumes
will reach 1.5 billion units by the end of 2016, up from 1.4
billion devices in 2015.

A doubled-faceted maturation developing in the smartphone market
is leading to greater sales decreases than previously expected,
notes Jackdaw Research.

Developed markets are reaching saturation, meaning that
the pool of first-time buyers is shrinking. If the
trend continues, it's likely that growth in these markets,
including in the US and Western Europe, will begin to decline.

Smartphones are becoming more polished and reliable,
and they continue to function to a sufficient degree several
years after purchase. The lack of cutting-edge
features being introduced to new devices is ushering in a trend
of consumers being comfortable with "good enough."

Nevertheless, the rise in larger-screen devices (phablets), as
well the addition of VR and AR tech to smartphones, will help
re-invigorate upgrade growth. These features, such as Google's
Daydream VR platform, will require the latest technology and
processor chips to run at the optimal level. As a result, users
will be required to upgrade their devices. This will also open up
new avenues of operation for app developers and advertisers,
including richer video-based advertisements and immersive app
experiences.

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The global smartphone market is expected to slow considerably
over the next few years. Despite a record-setting holiday
quarter, 2015 was likely the last year of double-digit growth for
smartphone shipments.

Mature markets were at the heart of this year's deceleration.
Adoption has reached new highs in key markets in the United
States, Europe, and China. The pool of first-time buyers in these
countries is shrinking rapidly, and sales are now primarily
coming from phone upgrades.

Meanwhile, emerging markets will continue to see robust shipment
growth. India and Indonesia, in particular, will help fuel a
large share of the shipments growth within the global smartphone
market over the next few years.

The global smartphone market is still growing at a steady
pace due to more widespread adoption in emerging markets. We
estimate the global market will hit about 2.1 billion units
shipped in 2021.

Shipments growth over the past few years has been driven by
the falling price of smartphones, which has made handsets more
accessible in emerging markets. The average selling price of a
smartphone in India nearly halved between 2010 and 2015.

With relatively low smartphone penetration, we forecast
Indian smartphone shipments to grow rapidly over the next five
years. Nevertheless, India has a long way to go before it
surpasses China as the world's leading market for smart handsets.
India is estimated to account for roughly 10% of the global
smartphone market in 2016, considerably less than China's 30%
share.

The global platform wars are over, even as smartphone
adoption continues to rise across various markets worldwide.
Android and iOS are estimated to account for 97.3% of global
platform market share in 2015, compared to 96.3% last year.

Apple closed the year with another strong quarter on the back
of its iPhone 6s and iPhone 6s Plus launches. Still, the vendor
saw a slight decline in YoY growth of its share of the market in
the face of stiff competition from Samsung and Chinese vendors
such as Huawei.

In full, the report:

Forecasts global smartphone shipments through 2021.

Explores why India is the next high-growth smartphone market.

Breaks down the global smartphone platform wars.

Discusses smartphone vendor performance market share.

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